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Victoria: survey indicates that the manufacturing industry is still in recession and that there is a need for a tariff review.

ELLEN FANNING: Well, back home, and it's not just Australia's
farmers who want a review of tariff cuts. Manufacturers in Victoria have
joined the bandwagon for a slowdown for the push for free trade. The latest
quarterly survey of the State's Chamber of Manufacturers shows Victoria
industry is still in recession, and there's widespread pessimism about the
prospects for the short term. The Chamber says Victorian manufacturing is
operating at below 70 per cent of capacity and there's an urgent need for a
review of tariff changes. The Chamber's national executive, John Paterson,
is speaking with Ali Moore, in Melbourne.

JOHN PATERSON: We don't see very much change occurring in terms of
sales and production or profitability in the months ahead and, if anything,
the present state of affairs is going to continue on as is, which is rather
disappointing.

ALI MOORE: Is the situation worse than forecast?

JOHN PATERSON: No, I don't think it is worse. I think we've had
some changes where people, in the past survey, have expected significant
growth to occur, and they are changing that to say there's going to be
slight growth and, at the same time, those that felt there was going to be a
significant contraction in business activity, have now moved away from that,
and there's a smaller number saying there's going to be a slight
contraction. So that I think from the two extremes they've come in, and the
main stream of them tends to believe that the current conditions are going
to apply for some time into the future.

ALI MOORE: Why are they still so pessimistic?

JOHN PATERSON: Well, they don't see anything happening, and the
previous survey already indicated that as far as the contents of the One
Nation statement was concerned, there was insufficient or very little in
there that would encourage particularly small business manufacturers,
relative to investment and having a better production level and demand level
for their products.

ALI MOORE: You've called for a change in the pace of tariff cuts.
Why should Victorian manufacturers or Victorian industry be given special
treatment?

JOHN PATERSON: Well, we're not asking for special treatment for
Victoria, we're saying that this applies to all manufacturing throughout
Australia. And I think what we're saying is that the tariff regime that has
been in existence for quite a number of years, did result in a number of
other things occurring, which have to be addressed. I mean, the tariff
level itself is only the consequence of a problem, and all the discussion
that is going on at the present time, is more directed to the consequences
with what level of tariffs, rather than addressing the problem, and that
problem is made up of many things, including sales tax, payroll tax,
training levies. All of these things have got to be looked at in terms of
our ability to be competitive with overseas manufacturers.

ALI MOORE: So, you're saying the pace of reform in those other areas
is not fast enough?

JOHN PATERSON: That's correct. I mean, the areas where we should be
at an advantage, in terms of our natural resources, particularly in oil and
gas and electricity, we find that we're taxed to world parity, to make us
equal to the world rather than give us an opportunity to use these
advantages for the betterment of our manufacturing and our society.

ALI MOORE: And that's despite One Nation?

JOHN PATERSON: Yes, it is. I think it's fairly clear that the One
Nation statement did provide some opportunities, but it was more directed
towards large investments in excess of $50 million It was more isolated
than we would have liked it to have been, rather than being a general
application to industry at large.

ALI MOORE: Would manufacturers be any better off under a Coalition
government?

JOHN PATERSON: Yes, at least they're addressing part of the problem
in terms of payroll and sales tax, which is not being handled or tackled in
the One Nation statement.

ALI MOORE: That's despite the fact that you'd have no guarantees
that those business costs would be reduced quickly enough to make up for the
reduction in tariffs?

JOHN PATERSON: Well, you've got to start somewhere. I think none of
us would be very sort of keen to use the word 'guarantee' about anything
these days, but I think if you do install a policy that's directed towards
improving things, then you've got to support it.

ELLEN FANNING: John Paterson from the Victorian Chamber of
Manufactures.